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    Jyoti CNC Auto.

    JYOTICNCStrong
    Capital Goods·18 Nov 2024
    Management Summary

    Jyoti CNC delivered a robust Q2 FY25 performance characterized by high double-digit revenue growth and substantial margin expansion. The company is successfully pivoting toward high-value segments like Aerospace and EMS, which is reflected in the record order book and improving realizations. Management is aggressively expanding capacity both in India and at its French subsidiary, Huron, to meet surging demand.

    Highlights

    8

    • Revenue from operations grew 43% YoY to ₹430.7 crores in Q2 FY25.

    • EBITDA margin expanded significantly to 25% from 18% in the previous year.

    • Operational PAT surged 352% YoY to ₹75.9 crores for the quarter.

    • Order book reached a record ₹4,289 crores, with Aerospace contributing 43%.

    • Quarterly order intake stood at ₹1,283 crores, driven by a massive surge in EMS orders (41% of intake).

    • Average machine price realization improved to ₹41.37 lakhs in Q2.

    • H1 FY25 revenue reached ₹793 crores, a 55% YoY growth with a 25% EBITDA margin.

    • Announced a ₹400 crore CAPEX to add 10,000 machine capacity at Rajkot by December 2025.

    What Changed1

    vs Q3 FY25

    Tone shiftGood → Strong

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹430.7 Cr+43%YoY
    2. 02EBITDA Margin25%
    3. 03Operational PAT₹75.9 Cr+3.5%YoY
    4. 04Order Intake₹1,283 Cr
    5. 05Order Book₹4,289 Cr

    Segment breakdown

    Revenue ContributionOrder Book Share
    Aerospace38%43%
    Auto & Auto Components29%15%
    EMS (Electronics Manufacturing Services)11%17%
    General Engineering16%16%
    Heatmap· 2 shared metrics

    Guidance & targets

    5
    CategoryTargetPriority
    Volume
    Annual Order Inflow
    ₹2,500 - ₹3,000 crores
    		High
    Volume
    Aerospace & Defense Order Intake
    ₹1,000 - ₹1,500 crores
    		High
    Capacity
    Rajkot Capacity Expansion
    10,000 machines
    		High
    Revenue
    Huron Peak Revenue Potential
    €80 million
    		Medium
    Margin
    EBITDA Margin Profile
    25%
    		Medium

    Risks & concerns

    5
    RiskSeverity

    Auto Sector Slowdown

    Analysts raised concerns about the domestic auto slowdown; management countered by highlighting the shift to EV/Hybrid components. — Analyst acknowledged

    medium

    Unbilled Revenue Buildup

    ₹90-100 crore increase in unbilled revenue related to EMS projects; management expects this to reduce drastically by Q4 as dispatches occur. — Analyst acknowledged

    medium

    Execution Delays at Huron

    Equipment installation delays pushed the Huron facility completion from September to December/January. — Both acknowledged

    low

    Areas of Evasion(2)

    • Specific full-year revenue and PAT forecast numbers.
    • Refusal to raise order inflow guidance despite strong H1 performance.

    Q&A highlights

    3

    “In terms of a, it's close to Rs. 700 crores now... This we have to deliver in one year.”

    Confirms a massive near-term revenue driver in the EMS segment with a clear 12-month execution timeline.

    asked by Ankur, HDFC Life Insurance

    2 min read5 chapters

    Detailed Narrative

    01

    Explosive Growth and Margin Expansion

    Jyoti CNC reported a stellar 43% YoY revenue growth in Q2 FY25, reaching ₹430.7 crores. This growth was accompanied by a significant expansion in EBITDA margins, which jumped from 18% to 25%. The margin improvement is primarily driven by a superior product mix, with high-margin aerospace and high-end machines contributing a larger share of the revenue. Operational PAT saw a massive 352% increase, reflecting the high operating leverage inherent in the business as it scales.

    02

    Strategic Pivot to Aerospace and EMS

    The company is successfully transitioning from being an auto-centric machine tool player to a high-technology supplier for Aerospace and EMS. Aerospace now accounts for 43% of the total ₹4,289 crore order book. The EMS segment has emerged as a major growth engine, contributing 41% of the Q2 order intake. Management highlighted a specific ₹700 crore EMS order that is slated for execution within the next 12 months, providing strong revenue visibility.

    03

    Massive Capacity Expansion Roadmap

    To support its burgeoning order book, Jyoti CNC has embarked on a ₹400 crore CAPEX plan at its Rajkot facility. This expansion aims to add 10,000 machines to its current 6,000-machine capacity by December 2025. The new facility will be highly automated and focused on entry-level and EMS products. Management expects this additional capacity to be critical for fulfilling the large pipeline of orders expected in FY26 and beyond.

    04

    Huron Graffenstaden Turnaround

    The French subsidiary, Huron, is central to the company's aerospace strategy. Despite minor delays in debottlenecking (now expected to be complete by Jan 2025), Huron's revenue potential is projected to reach €80 million post-expansion. In Q2, Huron contributed approximately ₹70 crores to the consolidated revenue with over 80% capacity utilization. Huron's technology backbone allows Jyoti to compete in the sophisticated 5-axis machine market globally.

    05

    Global Footprint and US Market Entry

    Jyoti CNC is aggressively expanding its international presence, with exports already accounting for 45% of H1 FY25 revenue. The company announced plans to establish a technical center and warehouse in the US within the next year to support large aerospace clients. This move is aimed at meeting the US market's demand for fast delivery and local support, positioning Jyoti to capture a larger share of the world's largest aerospace consumer market.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.